What Stripe's new $91 billion valuation means for payments

Stripe on Thursday raised its valuation while reporting earnings were in the black, and projected an aggressive artificial intelligence-powered payment strategy, a key growth area for financial technology. The company, which sells payment processing and related technology to businesses, said in its annual letter that it processed $1.4 trillion in payment volume in 2024, up 38% from the prior year. 

Stripe also said it was profitable in 2024 and expects to remain profitable in the current year. Stripe has extended a tender offer for employees and shareholders that values the company at $91.5 billion. Stripe in February 2024 offered a similar tender that valued the company at $65 billion.

Stripe's new valuation is close to the $95 billion valuation it had at its peak in 2021, at a time when investors were pouring money into payment technology companies and related fintechs during the wave of digitization that accompanied the COVID-19 pandemic. The market correction that followed caused these valuations to slide as companies downsized and changed their strategies. 

Investors are betting on a turnaround in fintech for 2025, driven by companies that can demonstrate profitability in addition to growth and are embracing new forms of AI that can be quickly deployed at scale.

"Stripe has been a fintech unicorn for years now and I don't see that slowing down as they continue to grow," said Tony DeSanctis, a senior director at Cornerstone Advisors. 

Stripe, which is privately held, does not report quarterly earnings. It told CNBC that it is not planning to go public at this time, saying its growth patterns do not fit neatly into quarterly reports. 

Stripe did not make an executive available for an interview. Its public relations office said the company is "building machine learning and AI into all of our products" and mentioned the company is expanding its ability to offer AI-powered "optimized checkout." 

Stripe reported AI startups such as OpenAI, Anthropic, Perplexity and Mistral are clients, and it added more than 700 clients in 2024 that focus on "agent AI." The definition of agent AI, or agentic AI, differs, but generally refers to AI that can "make decisions" or product content or execute an action with little or no human interaction. 

Stripe recently introduced an AI-powered fraud detection system and has used OpenAI's technology to develop its own generative AI-powered technology while providing payment processing for OpenAI, the developer of ChatGPT.

In recent months Stripe has added a software development kit for external programmers to build agentic AI applications and is developing technology that allows AI agents to issue virtual payment cards. 

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"Our agent toolkit is already being downloaded by developers thousands of times every week as startups," Stripe said in its letter. 

Among other payment companies, PayPal and Klarna are also investing in AI. PayPal's Fastlane uses AI to route payments to the best option for a consumer based on cost, speed, loyalty and other factors — providing a service similar to the "payments optimization" that Stripe described in its letter.

Klarna, which is preparing its U.S. initial public offering, has used AI to change the company's internal work patterns and is using gen AI to inform product recommendations for shopping. More than three-quarters of financial institutions say generative AI has become an important part of technology strategy, according to research from Arizent, American Banker's publisher, noting customer service, security risk management, marketing and business development are among the top uses. 

Given Stripe's size and influence, its valuation has often been viewed as a bellwether for other payment technology companies. 

Stripe's new valuation is private and "rich," but  it signals that investors have an appetite for profitable growth records the investors think are sustainable, according to Eric Grover, principal at Intrepid Ventures, noting the valuations of many mainstream mature payment processors are still well off of their highs.

"[These traditional payment firms] were consolidation plays based on the thesis that increased scale and delivery footprints, and greater breadth of complementary payment processing assets, would make them more competitive and boost growth," Grover said. "Sometimes it doesn't pan out. FIS, Worldline and Global Payments have all moved to simplify their businesses."